The energy plus capacity generation payment scheme offered by Ontario Hydro encourages small hydro plants to operate during the occurrence of monthly peak demand. Such a desired mode of operation for the majority of hydro plants is feasible because unlimited continuous operations are possible. However, the existence of non-compatible uses may significantly limit the continuous operations and also the revenue. Such situations present challenging opportunities for the development of operating rules to ensure the small hydro plants are operating during the occurrence of the monthly peak demand. One such case of a small hydro plant in Thunder Bay is the focus of this investigation. The revenue generation of a small non-utility hydro-power plant is governed primarily by the energy output and effective capacity at the time of monthly demand peak. To maximize revenue, the likelihood of operation during the peak is viewed under minimal inflow conditions. To increase this likelihood, climatic effects on electrical demand are analyzed and found to have a positive correlation with the demand rate and a considerable effect on the time and magnitude of peak occurrence. Based on observed and forecast weather conditions, a method for estimating the likelihood of peak occurrence for individual days is presented. A spread-sheet-based program incorporating the likelihood of peak demand occurrences and the operation constraints for optimizing daily operation periods within a week is also developed to enhance the revenue maximization of small hydro power plants.
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